Māori-owned farms: Good business even amid COVID-19

The outlook for Māori-owned farms is “surprisingly strong” despite the worldwide impact of the COVID-19 pandemic, was what I told Stuff’s Susan Edmunds in a recent interview.

The most recent data that is available from Statistics New Zealand shows that Māori authority farming businesses had profits of $97 million in 2018 – almost double their level from a year earlier.

Māori-owned farming businesses have benefited from a broad-based lift in demand conditions for a range of agricultural products.

In the 2018 dairy season, farmgate milk prices had risen more than 50% from their 2015 and 2016 lows. At the same time, the 2018 dairy season was one of extremely good milk production. Māori-owned farms were able to translate these twin trends into higher profitability.

Māori have also traditionally had a strong focus on livestock farming, with pricing for both sheep and beef having risen over recent years.

Outlook strong despite COVID-19

Māori-owned farms have a strong outlook, even given the worldwide effects of the COVID-19 pandemic.

Since February, New Zealand’s export earnings have been on par with a year ago. This export resilience was driven by higher earnings from dairy, meat and fruit exports, which offset softness in seafood and forestry exports. The reality is that even during the pandemic, the world has to eat. This is good news for our agricultural sector and Māori-owned farms.

Although at the margins, some operations that focus on high value add product that goes into the restaurant trade may suffer from less socialising in major markets, our volume-driven food exports will continue to earn good returns. At the same time, a lower New Zealand dollar and cheaper fuel prices are helping support profitability.

Solving employment issues are the challenge

The key challenge for Māori farms over the year ahead will be staffing. Many agricultural businesses employ not just New Zealanders, but significant volumes of migrant workers as well. With migration to New Zealand being limited, farms will need to work hard on their staff retention and on pathways into farming for those that have become unemployed in other sectors as a result of the pandemic.

There is an expectation that young Māori will be disproportionately affected by COVID-19 related job losses, so the ability to tap into emerging opportunities in Māori-owned farms would be helpful from a social wellbeing perspective.